New Year’s means new revenues for Maryland’s fitness industry

Health clubs enjoying annual January boost

Harry Jenkins of Shepherdstown, W.Va., works out on a treadmill in main workout area at the Fitness First health club in Frederick on Wednesday.

“Instead of coming in twice a week, they may work out here four to five times a week,” Steven E. Morningstar, general manager of Fitness First in Frederick, said of existing clients’ tendencies in January.

Tom Fedor/The Gazette

Patrick Thompson of Dickerson shoots hoops in the Fitness First gym in Frederick.

Tom Fedor/The Gazette

Madeleine Benda of Frederick works out on a treadmill at Fitness First in Frederick.

Tom Fedor/The Gazette

Harry Jenkins of Shepherdstown, W.Va., works out on a treadmill in main workout area at the Fitness First health club in Frederick on Wednesday.

Steven E. Morningstar looks forward to January with both pleasure and a bit of dread.

“It’s a Catch-22,” said Morningstar, general manager of Fitness First Health Club on Westview Drive in Frederick. “It’s like March and April in the tax business. It does help our business, but the days are long.”

Losing weight was the top New Year’s resolution this year, while exercising tied for second with improving finances, according to a Harris Interactive poll of more than 3,000 adults in December. The result: more folks waiting to use the treadmills and circuit weight machines at health clubs starting Jan. 1.

The typical increase in membership during January at Fitness First’s 17 facilities is between 50 percent and 75 percent, said Amy DiPasquale, COO of the company, which is based in Frederick.

But the pace slacks off by mid-March as people become less enthusiastic over their resolutions, although Fitness First tends to have a fairly high percentage of clients who stick with their exercise routine, Morningstar said.

Some 64 percent of people keep their resolutions past one month, while only about half do so after three months, according to a study headed by John C. Norcross, a professor of psychology at the University of Scranton, Pa.

It’s not just new members who add to the more crowded clubs this time of year, but existing clients also resolve to work out more often, Morningstar said.

“Instead of coming in twice a week, they may work out here four to five times a week,” he said.

Other clubs in Maryland report a similar trend.

Curves International, a franchiser in Woodway, Texas, with 46 fitness and weight-loss facilities in Maryland catering primarily to women, signed up “tens of thousands” of new members nationwide in January, said Katy Bauer, area director for Maryland, Delaware, New Jersey, Virginia and Washington, D.C. The first Curves opened in 1992, and there are now more than 7,000 sites in 90 countries, including 3,600 clubs in the U.S. and Canada.

“It’s looking like we’ll surpass last January’s [2012] numbers for new members,” said Bauer, who also owns some Curves franchises in Montgomery County.

During the 2012 first quarter, the total membership of Town Sports International of New York, which operates some 160 clubs nationwide and in Switzerland, including four Washington Sports Clubs in Maryland, increased by 10,000 to 533,000 before declining by 11,000 by Sept. 30, according to company financial reports.

Membership at Life Time Fitness of Chanhassen, Minn., which runs 105 centers in North America, including in Rockville and Columbia, rose by about 28,000 in last year’s first quarter to 704,500 before declining by some 9,000 by September, according to financial reports.

Growing in lean times

Contrary to some industries, health clubs did not see a big decline in business during the Great Recession. From 2008 to 2009, total membership at health clubs nationwide dropped by only 200,000, or less than 1 percent, according to figures from the International Health, Racquet and Sportclub Association of Boston.

The following year, membership shot up by 5 million and an additional 1 million in 2011. Revenues rose 22 percent in 2011 from 2006 to $21.4 billion, according to the association. The number of clubs hasn’t grown nearly as much, rising only 3 percent in 2011 from 2006 to almost 30,000.

Fitness First saw membership increase, even during the recession, DiPasquale said.

“We’re a little bit recession proof,” she said. “People still want to look good and feel good about themselves, even in a down economy.”

Fitness First works to keep rates low, including a $29 per month offer, she said.

“People are able to justify paying that price,” DiPasquale said.

While membership fluctuated some for Town Sports International during the Great Recession, its total of 522,000 in September was 8 percent above its 2007 pre-recession level.

Some 55 percent of people who aren’t members of a health club cite cost as a barrier to joining, according to a recent survey by the sport club association.

Planet Fitness of Newington, N.H., is offering a $10 monthly rate. The company has 19 clubs in Maryland, with four that recently opened in Rockville, Waldorf, Elkton and Greenbelt. The business reached 600 locations in late December, among the most of any general health club.

A manager at a busy Planet Fitness in Gaithersburg, where use of a treadmill was at a premium, said Wednesday he had to refer questions to a company spokesman, who did not contact The Gazette by Thursday. The company’s website says it does not have salespeople, and “we don’t bother with all the extras like juice bars and child care that drive up costs and can make a gym membership seem more like a car payment.”

Offering more amenities, programs

Washington Sports Clubs, with facilities in Bethesda, Silver Spring and Germantown, and others owned by Town Sports International have made good inroads in personal training and small group training, Bob Giardina, president and CEO of Town Sports, said during a recent conference call with analysts.

“We are attracting great training talent within our clubs and will continue to expand on our small group training offerings,” Giardina said. “There is no doubt in my mind that this will continue to be a meaningful source of revenue growth for the company.”

In the first nine months of 2012, Town Sports revenues rose 4 percent from the same period in 2011 to $364.8 million, while net income quadrupled to $12.4 million.

Most people who are serious about losing weight know they won’t get the results they want by just dieting, and that was why Curves recently rolled out the Curves Complete program offering exercise, customized meal plans, an online portal and coaching, Bauer said.

“They also need to exercise, and they need encouragement to stick to the plan,” she said. “The best part is that the cost is comparable to what other programs charge for diet alone.”

Almost all of weight lost through the Complete program is body fat, while many conventional diets in which weight is lost typically includes up to 30 percent of muscle tissue, Bauer said. The centers have hydraulic resistance strength-training machines designed for women, alternated with 2-by-2-foot cushioned squares.

Some large clubs have opened in Maryland the past couple years. Sport & Health Clubs of McLean, Va., which has six facilities in Maryland, opened its second one in Frederick on Osprey Way in November. That 42,000-square-foot club features cardio equipment with personal viewing screens, suspension training, classes in Zumba and yoga, a basketball court, an indoor swimming pool, a Finnish sauna and a Kidz Klub with a climbing maze, Wii gaming system and chalkboard wall.

LA Fitness of Irvine, Calif., which has 15 clubs in Maryland, opened a 55,000-square-foot facility in Rockville about two years ago. It has a basketball court, swimming pool and classes in dance, pilates, yoga and fitness.

Remodeled club

The Westview Frederick club, Fitness First’s second in that city, has been entirely remodeled after the company bought the former Frederick Athletic Club in April, Morningstar said. It’s the company’s only location with a 6,000-square-foot gym that features an NBA regulation-size basketball court.

“That helps us attract new members,” Morningstar said. “We don’t just use it for basketball but have other sports like volleyball and dodge ball. Eventually, we want to have leagues.”

The 22,000-square-foot facility on Westview is the company’s newest one, with upgraded treadmills, virtual reality bikes, rowing machines, circuit and free weight equipment, and an Olympic lifting platform. It also has new Sproing training machines, which feature a soft, cushiony surface to absorb impact and pulleys for both strength and cardio training, and classes.

The company is opening its 10th club in the state in Columbia in April, which will also be about 22,000 square feet but not have a basketball court. Fitness First also has seven facilities in Northern Virginia and one in Washington, D.C.

The company works hard at retaining members and helping them keep resolutions through classes, special events, and even emailing them with encouraging messages, DiPasquale said.

Local companies such as Bethesda beverage business Honest Tea offer employees club memberships. Fitness First works with numerous human resources departments to tailor such programs, DiPasquale said.

“Some offer that as a benefit and subsidize the monthly fee,” she said. “But we have seen some employers phasing out contributing to the employee’s membership.”

Corporate memberships in group sales have not met expectations lately, Giardina with Town Sports said.

“Maybe this is one area where economic uncertainty could be having a slight impact,” he said.

For every dollar a company spends on a wellness program such as offering a gym membership, it saves $3.27 in medical costs and $2.73 in absenteeism costs, according to a Harvard University study. A gym membership also can help reduce employee turnover, increase productivity, attract new workers and lower costs for public programs such as disability insurance and Medicare, Harvard researchers said.